Florida Today (Originally Published in Florida Today)
By Edward J. Kinberg
The basic difference is pretty simple. Articles of Incorporation are public records, Bylaws are not.
In Florida, most businesses must file some sort of organizational document with the Secretary of State’s Office before starting to do business in the State. For a corporation, this document is called “Articles of Incorporation” and “Articles of Organization” for a Limited Liability Company (LLC). Organizational documents can be characterized as “notice” documents; they are public records anyone can look at to find out who started the business.
The Articles for both business types must include the full name of the company, its official business address and the name and address of a Registered Agent. The Registered Agent is an individual or business that has a regular address, is open every day and can readily be located in order to serve legal notice on the company. In the case of a corporation, the name and address of each incorporator must be listed in the Articles of Incorporation. In order to make sure the information recorded with the State continues to be up to date, corporations and LLC’s must file an Annual Report.
Partnerships and sole proprietorships are not required to register with the state unless they are going to do business in any name other than the name of the owner(s). In that case, they must file a “fictitious name” registration.
Most businesses prefer to put the minimal amount of information about their company in public records. The detailed information about how the company will operate is in a company’s Bylaws, in the case of a corporation, or the Operating Agreement in the case of an LLC.
A corporation must have Bylaws and the Bylaws may include any provisions that are “not inconsistent” with Florida’s corporate laws. In contrast, the LLC statute does not require an LLC to have an Operating Agreement, however, it contains a detailed list of items that “may not” be in an operating agreement such as unreasonably restricting a members right to business records or eliminating the obligations of good faith and fair dealing.
While an Operating Agreement may not be required, having well drafted Bylaws or Operating Agreement that clearly defines the duties and responsibilities of the owners will help avoid future disputes.